Crude oil prices increased sharply on Thursday amid worries that the US might launch a military strike against Iran, which could disrupt supply from the region, extending gains for a third day.
Bonny Light, Nigeria’s premium grade, traded at roughly $69 per barrel.
US West Texas Intermediate crude increased 92 cents, or 1.5 percent, to $64 per barrel, while Brent crude futures increased 94 cents to $69.34 per barrel.
Trump’s proposed attack against Iran
Both contracts are at their highest level since September 29 and have increased by roughly 5% since Monday because of President Donald Trump’s increased pressure on Iran to halt its nuclear program through threats of military action as a U.S. naval unit reached the area.
President Trump is thinking about attacking Iranian security forces and leaders to spark protests and possibly overthrow the current government.
- Donald Trump urged Iran to come to a nuclear deal on Wednesday, saying that “time was running out” before the United States attacked Tehran.
A massive armada is heading towards Iran,the president of the United States continued. He wrote, “As with Venezuela, it is ready, willing, and able to swiftly accomplish its mission, swiftly and violently, if necessary.”
- According to a US official on Wednesday, there are ten US ships in the Middle East overall, which is about the same as the number of ships in the Caribbean before the abduction of former Venezuelan leader Nicolas Maduro.
- Iran is one of the top ten oil-producing nations and borders the Strait of Hormuz, which is where about 20% of the world’s crude oil is produced. Iran is the fourth-largest producer in the Organization of Petroleum Exporting Countries, with a daily production of 3.2 million barrels.
The global energy market is adding a risk premium to prices amid rising tensions with Washington. Particularly after the White House reiterated its threats on Tuesday, declaring that the US would stop aiding Iraq, a significant black gold exporter.
“Unplanned outages in Kazakhstan and the US (Winter Storm Fern) have had a temporary impact as well, but the main driver of oil prices remains geopolitical risk premium surrounding Iran and the Middle East,” according to DBS Bank.
The massive Tengiz oilfield in Kazakhstan is being restarted in stages after electrical fires cut output last week to reach full production in a week. Crude and gas producers in the United States, the world’s largest oil producer and exporter of liquefied natural gas, were restarting wells after the severe cold caused by Winter Storm Fern over the weekend.
US crude inventories decreased by 2.3 million barrels to 423.8 million barrels in the week ending January 23, according to the Energy Information Administration on Wednesday.
Nigeria’s oil production still below OPEC quota
Average crude oil output from Nigeria (not including condensates) hovered around 1.45 million barrels per day (bpd) in 2025. Total hydrocarbons production (including condensates) saw an increase of about 1.64 million bpd.
- Significant month-on-month changes in recent months, and in December 2025, output was approximately 1.422 million bpd, down from November’s 1.436 million bpd.
- OPEC+ continues to restrict Nigeria to a production quota of 1.5 mbpd (ex. condensates) through December 2026.
- The Nigerian government’s strategy is evidenced by the recent (December 2025, January 2026) licensing round, which offers 50 blocks (including frontier areas such as the Lake Chad basin) and lowered entry restrictions to stimulate investment.
The federal government has aggressive targets of 2.7 million bpd by 2027 and higher by 2030, but OPEC caps (approximately 1.5 million bpd for 2026, excluding condensates) stifle targets without significant new investment.
Newly announced production potential in previously neglected basins, such as the Chevron/NNPC Awodi-07 well in the shallow offshore Niger Delta, which has been noted for oil/gas, is awaiting commercial production (between 2027-2031) as production of final volumes will have little impact on output in the near term.
